Julian Moxon and Gilbert Sedbon/PARIS
FRANCE OFFICIALLY opened its internal air routes to competition from national airlines on 1 January, marking the final phase of the country's transformation to the fully liberalised European internal air-transport market on 1 April, 1997.
All French airlines are now free to compete on any domestic route without special Government authorisation, bringing to an end the once-total monopoly held by Air Inter and its parent, Air France. As part of its response to the new competition, Air Inter has been renamed Air Inter Europe, and is being restructured to become Air France Europe in 1997 - a move which involves taking over its parent's European operations.
Italian flag carrier Alitalia quickly entered the new competitive environment in France by starting a service on 2 January with a McDonnell Douglas MD-82 from Nantes on the Atlantic coast to Lyon, and then on to Rome. Foreign airlines now have the right to operate routes in France as long as the aircraft's journey is completed outside the country. Alitalia has also started a Toulouse/Lyon-Rome service on the same day.
Several major routes from Paris Orly are already competed by French airlines, including those to Bordeaux, Marseilles, Nice, Toulouse and Strasbourg. Now, services to other destinations such as Brest, Lyon, Mulhouse, Pau, Perpignan and Toulon will follow, with non-state-owned French carriers AOM, Air Liberte and TAT indicating their intentions to compete.
Air Liberte President Lotfi Belhassine has revealed plans to open 23 new domestic routes this year, following its success on the Paris-Toulouse route, with what it says will be an "aggressive" pricing policy on the Paris-Nice service.
Air France Europe has suffered a reduction in passenger traffic, since the arrival of competition. Its previous annual total of 17 million passengers, has been cut, by some 800,000 passengers in 1995. The carrier is also suffering from the growth of France's high-speed train network. Added to this, French domestic routes are not experiencing growth, so existing passenger traffic, is having to be shared with new entrants.
Competition on newly opened routes is expected to be intense, and some question the ability of the independents to operate them profitably, especially if more than two carriers attempt to fly the same route. In a clear attempt to soak up some of the competition, Air Liberte has taken over the passenger operations of Euralair, and is attempting (so far without success) to purchase AOM.
If the move succeeds, Air Liberte would become the sixteenth-largest airline in Europe. Meanwhile, TAT, 49.9% of which is owned by British Airways, suffered losses of Fr583 million ($117 million) in 1994/5. The carrier will become totally owned by BA on 1 April, 1997 (the date of full liberalisation).
Source: Flight International
